Perth Mint Online Depository Program
Moderator: Global Moderator
- williswine
- Associate Member
- Posts: 49
- Joined: Mon Sep 13, 2010 6:23 pm
Re: Perth Mint Online Depository Program
I've been a happy Perth Mint Depository Program account holder since last year for unallocated gold. I haven't received this email but all my dealings with the mint have been flawless. I should post on this separately.
This year, I have enough in the account that I need to report it on form 8938. This account is in my name only. I think it is considered a "Foreign Deposit Account" so has to be reported in Part I rather than II and also in Part V rather than VI of form 8938. What is not super clear to me is whether such account for unallocated gold count as a "Deposit Acccount" (my current interpretation) or as a "Custodial Account". Do some of you have had to report such account, and if so, did you report as deposit or custodial?
This year, I have enough in the account that I need to report it on form 8938. This account is in my name only. I think it is considered a "Foreign Deposit Account" so has to be reported in Part I rather than II and also in Part V rather than VI of form 8938. What is not super clear to me is whether such account for unallocated gold count as a "Deposit Acccount" (my current interpretation) or as a "Custodial Account". Do some of you have had to report such account, and if so, did you report as deposit or custodial?
- williswine
- Associate Member
- Posts: 49
- Joined: Mon Sep 13, 2010 6:23 pm
Re: Perth Mint Online Depository Program
Sophie, ahrunforthehills: seeing your previous posts on the forum, would you perhaps be able to chime in here?williswine wrote: ↑Thu Apr 02, 2020 4:15 pm This year, I have enough in the account that I need to report it on form 8938. This account is in my name only. I think it is considered a "Foreign Deposit Account" so has to be reported in Part I rather than II and also in Part V rather than VI of form 8938. What is not super clear to me is whether such account for unallocated gold count as a "Deposit Acccount" (my current interpretation) or as a "Custodial Account". Do some of you have had to report such account, and if so, did you report as deposit or custodial?
-
- Executive Member
- Posts: 326
- Joined: Tue Oct 19, 2010 3:35 pm
Re: Perth Mint Online Depository Program
Sure, I just whipped out my tax return. Perth always seem to be in that gray area of reporting... but i don't mess around with my Uncle Sam.williswine wrote: ↑Sun Apr 05, 2020 2:41 pmSophie, ahrunforthehills: seeing your previous posts on the forum, would you perhaps be able to chime in here?williswine wrote: ↑Thu Apr 02, 2020 4:15 pm This year, I have enough in the account that I need to report it on form 8938. This account is in my name only. I think it is considered a "Foreign Deposit Account" so has to be reported in Part I rather than II and also in Part V rather than VI of form 8938. What is not super clear to me is whether such account for unallocated gold count as a "Deposit Acccount" (my current interpretation) or as a "Custodial Account". Do some of you have had to report such account, and if so, did you report as deposit or custodial?
We report on both our FBAR and Form 8938.
Form 8938: My Part II and III are blank. Part V, Box 1 - Custodial (Not Deposit)
FBAR: Part III, Box 16 Type of account = Other (Commodities)
I declare the highest monthly balance that I had for the year in US Dollars.
A side note, you can ask the Perth to email you monthly statements for your records.
Not sure how relevant this is, but several years I had a REALLY EXPENSIVE tax adviser (and when I say "adviser", I mean he gave advice but rarely filled out any forms).
This guy followed what happened in tax court like a hawk, would speak before congress, specialized in international taxation, had lots of connections, etc. He had stories that were crazy. Anyways, he would tell me that it is always best to bury the IRS in information.
The more you give them, the less ammo they will have to hold penalties over you in tax court. In some ways, the burden shifts to them since you went above and beyond providing them with the information. They can't really claim that you were purposely withholding information when what really happened is their tax forms make no frickin sense and even CPA put crap in the wrong box. Penalties are the lifeblood of the IRS. Take that away from them and you are a lot less of a juicy target. At least... that was the general gist of what I interpreted from him.
Another side note, the IRS recently made it so you can download your tax transcripts off of their website at any time. This is pretty quick and easy transparency to make sure you and Uncle Sam are on the same page.
IMPORTANT NOTE: I am not a tax professional and am not providing any advice. The above is just what I did and what I heard, not necessarily what you should do or make decisions on. Consult a tax professional.
Re: Perth Mint Online Depository Program
Thanks ahrun!!! I haven't had to file that form yet, just the FBAR. Next year, probably.
- williswine
- Associate Member
- Posts: 49
- Joined: Mon Sep 13, 2010 6:23 pm
Re: Perth Mint Online Depository Program
Thank you very much ahrunforthehills! I originally considered Perth Mint accounts to be custodial. I've been oscillating between the two possible choices reading the IRC and trying to interpret it. It's of course thorny but what seems to matter is that the mint is not a bank. I should share my analysis when I can find the time.
Meanwhile, I would appreciate if you could share whether your account is a PMDP (offline) as opposed to a PMDO (online) and whether its gold is allocated or unallocated. I don't think the latter matters as far as how to categorize the account but at some point I was wondering if allocated would be custodial while unallocated would be depository. Of course, these accounts having "Depository" in their names does not help yet doesn't mean categorizing as custodial is wrong. Just adds to the confusion!
Another question is whether you're aware of anything a US taxpayer (who has no connection to Australia other than such account) has to do to comply with any Australian tax office requirement. My research indicated there is nothing special to do in that case since the tax residence of the taxpayer is US rather than Australian but of course I would be interested in hearing from you based on your experience.
I wasn't aware the mint could provide monthly statements. I should ask them!
I am not sure to follow how the transcripts help with regards to making sure a taxpayer and the IRS are on the same page. I guess I'll have to download myself. I believe it was impossible for a while.
Meanwhile, I would appreciate if you could share whether your account is a PMDP (offline) as opposed to a PMDO (online) and whether its gold is allocated or unallocated. I don't think the latter matters as far as how to categorize the account but at some point I was wondering if allocated would be custodial while unallocated would be depository. Of course, these accounts having "Depository" in their names does not help yet doesn't mean categorizing as custodial is wrong. Just adds to the confusion!
Another question is whether you're aware of anything a US taxpayer (who has no connection to Australia other than such account) has to do to comply with any Australian tax office requirement. My research indicated there is nothing special to do in that case since the tax residence of the taxpayer is US rather than Australian but of course I would be interested in hearing from you based on your experience.
I wasn't aware the mint could provide monthly statements. I should ask them!
I am not sure to follow how the transcripts help with regards to making sure a taxpayer and the IRS are on the same page. I guess I'll have to download myself. I believe it was impossible for a while.
- vnatale
- Executive Member
- Posts: 9490
- Joined: Fri Apr 12, 2019 8:56 pm
- Location: Massachusetts
- Contact:
Re: Perth Mint Online Depository Program
Anyone else share MachineGhost's position on Perth Mint?MachineGhost wrote: ↑Mon Apr 25, 2016 7:04 pm This is the best news in a long time!!!
Still, its a liability of Perth and not your asset. It is a Ponzi scheme if you request "your" metal. And if they have to source it outside of other Ponzi scheme participants due to excess demand in a crisis, you may not receive "your" metal at all while the price continues to skyrocket.How can unallocated be 100% backed, yet there is no storage fee?
Unlike other depositories, which are merely warehouses, The Perth Mint is a manufacturer of precious metal products and one of the world's largest refiners. Accordingly, we have a substantial requirement for physical metal to support these operations.
To fund this working inventory, we traditionally borrowed metal from bullion banks, at cost. At the same time, investors were depositing metal with bullion banks and others and being charged storage fees.
We realised there was an opportunity to cut out the intermediary and take deposits directly from investors. The Perth Mint's unallocated is thus a win-win situation: we get to "borrow" precious metal to use in our business for free and you get 100% backed safe storage of your precious metal for free.
We don't charge storage fees on unallocated because the costs of vaulting and insuring our working inventories of gold and silver are part of our business and covered by the fabrication fees we charge for our bars and coins - we would incur these costs whether our metal was sourced from you or a bullion bank. We charge storage fees on allocated and pool allocated because we incur additional vaulting and insurance costs for storing this custodial precious metal.
They have very steep transanction fees, allocated storage fees and fabrication fees. Not much has changed.
Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
- vnatale
- Executive Member
- Posts: 9490
- Joined: Fri Apr 12, 2019 8:56 pm
- Location: Massachusetts
- Contact:
Re: Perth Mint Online Depository Program
!!!!!!!!!!!!!!MachineGhost wrote: ↑Tue Apr 26, 2016 3:24 pmThat's not the point. It's about title and ownership. You don't own anything in unallocated storage and have no legal claim on it. It's a liability on the books of Perth Mint and there is no guarantee there is enough gold readily available at any one time to supply withdrawal demand. In other words, there's no FR or FDIC to deal with a "bank run". Unallocated gold is like going back to the past and suffering the same "wildcat banking" indignities all over again.AdamA wrote:I'm not sure I agree. I think either you trust the mint or you don't.MachineGhost wrote:
Yeah, but no one with a brain would use unallocated storage except as a temporary parking place.
If they're not honest enough to honor the unallocated storage, then why would anyone expect them to honor the allocated storage?
A real asset is only "real" if its literally real.
MachineGhost wisdom? Or, not?
Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
-
- Executive Member
- Posts: 5994
- Joined: Wed Dec 31, 1969 6:00 pm
Re: Perth Mint Online Depository Program
Yes. There's something amiss if they aren't charging you for storage.vnatale wrote: ↑Fri Apr 24, 2020 8:17 pm!!!!!!!!!!!!!!MachineGhost wrote: ↑Tue Apr 26, 2016 3:24 pmThat's not the point. It's about title and ownership. You don't own anything in unallocated storage and have no legal claim on it. It's a liability on the books of Perth Mint and there is no guarantee there is enough gold readily available at any one time to supply withdrawal demand. In other words, there's no FR or FDIC to deal with a "bank run". Unallocated gold is like going back to the past and suffering the same "wildcat banking" indignities all over again.AdamA wrote:I'm not sure I agree. I think either you trust the mint or you don't.MachineGhost wrote:
Yeah, but no one with a brain would use unallocated storage except as a temporary parking place.
If they're not honest enough to honor the unallocated storage, then why would anyone expect them to honor the allocated storage?
A real asset is only "real" if its literally real.
MachineGhost wisdom? Or, not?
Vinny
Re: Perth Mint Online Depository Program
The Perth Mints unallocated gold is physical gold being processed. So it is real, however not immediately deliverable ie. Molten Gold in a furnace. The Mint is owned by the Western Australian Government so it's not a private entity.Libertarian666 wrote: ↑Thu Apr 30, 2020 7:24 pmYes. There's something amiss if they aren't charging you for storage.vnatale wrote: ↑Fri Apr 24, 2020 8:17 pm!!!!!!!!!!!!!!MachineGhost wrote: ↑Tue Apr 26, 2016 3:24 pmThat's not the point. It's about title and ownership. You don't own anything in unallocated storage and have no legal claim on it. It's a liability on the books of Perth Mint and there is no guarantee there is enough gold readily available at any one time to supply withdrawal demand. In other words, there's no FR or FDIC to deal with a "bank run". Unallocated gold is like going back to the past and suffering the same "wildcat banking" indignities all over again.AdamA wrote:I'm not sure I agree. I think either you trust the mint or you don't.MachineGhost wrote:
Yeah, but no one with a brain would use unallocated storage except as a temporary parking place.
If they're not honest enough to honor the unallocated storage, then why would anyone expect them to honor the allocated storage?
A real asset is only "real" if its literally real.
MachineGhost wisdom? Or, not?
Vinny
That said, I only hold allocated gold/silver there as a part of my retirement account.